The Committee on Government Affairs was called to order at 8:25 a.m., on Tuesday, March 9, 1999. Chairman Douglas Bache presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All Exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

COMMITTEE MEMBERS PRESENT:

Mr. Douglas Bache, Chairman

Mr. John Jay Lee, Vice Chairman

Ms. Merle Berman

Mrs. Vivian Freeman

Mr. David Humke

Mr. Harry Mortenson

Mr. Roy Neighbors

Ms. Bonnie Parnell

Ms. Gene Segerblom

Mr. Kelly Thomas

Ms. Sandra Tiffany

Ms. Kathy Von Tobel

Mr. Wendell Williams

COMMITTEE MEMBERS EXCUSED:

Ms. Dawn Gibbons

STAFF MEMBERS PRESENT:

OTHERS PRESENT:

• BDR 23-234 – Repeals limitation on amount of unused sick leave employee

in public service is entitled to carry forward from year to year (A.B. 446).

• BDR 27-573 – Exempts contracts for purchase of computer hardware and

associated peripheral equipment and devices from requirements for

competitive bidding set forth in Local Government Purchasing Act

(A.B. 445).

Assemblyman Williams informed Chairman Bache three witnesses from Las Vegas were unable to be present because of weather conditions. He requested Chairman Bache reschedule the hearing on A.B. 368.

Pursuant to Mr. William’s request, Chairman Bache announced the hearing on A.B. 368 would be rescheduled.

Chairman Bache reopened the hearing on A.B. 12 to ascertain if changes previously made to the bill met the needs of everyone involved. He provided copies of a letter from Nancy E. Wong, Division Counsel for the Department of Business and Industry’s Division of Industrial Relations (Exhibit C).

Carole Vilardo, President, Nevada Taxpayers Association, testified. She stated the first reprint of A.B. 12 met with Nevada Taxpayers Association’s satisfaction. She thanked Chairman Bache, the committee’s research staff and committee counsel, and everyone who worked to find language for the bill that would satisfy everyone involved.

Ms. Vilardo said there were several agencies with whom she had not spoken since A.B. 12 was reprinted; however, most agencies indicated they were in favor of the bill. She expressed unwillingness to have further amendments made to A.B. 12 other than a technical amendment to page 3, line 9, to replace "Division of Environmental Protection of the State Department of Conservation and Natural Resources" with "Division of Industrial Relations Occupational Safety and Health Section."

Chairman Bache said the amendment Ms. Vilardo proposed was a technical correction to conform to the committee’s intent when it previously amended A.B. 12, and if that was the only amendment to be made, it could be made through an "asterisk copy" of the bill.

Assemblywoman Segerblom asked whether the Division of Industrial Relations’ Occupational Safety and Health Section concurred with the amendments to A.B. 12.

Nancy E. Fong Wong, Division Counsel, Division of Industrial Relations, Department of Business and Industry, State of Nevada, testified. She said the Division of Industrial Relations concurred with the technical change Ms. Vilardo proposed be made to A.B. 12 and had no opposition to the bill.

Donna Sweger, Supervising Attorney, Nevada Attorney for Injured Workers, Department of Business and Industry, State of Nevada, testified. She pointed out section 2, subsection 2(d), of the first reprint of A.B. 12 discussed manuals of internal policies and procedures and audit procedures used solely to train or provide guidance and not used as authority in contested cases. She said Nevada Attorney for Insured Workers did not believe that section was workable. She explained when agencies such as Employers Insurance Company of Nevada established policy regarding how a claims examiner was to deal with a determination issue, that policy should be considered regulation and be subject to the requirements established for the making of regulations. Such agencies made determinations based on policy decisions; therefore the Nevada Attorney for Injured Workers believed those policies should be deemed regulations.

Chairman Bache asked Ms. Vilardo to address Ms. Sweger’s concern. He commented to Ms. Sweger, "I’m curious, because in our previous hearings on A.B. 12, I don’t believe you were involved."

Ms. Vilardo stated Ms. Sweger’s testimony was the first she heard of the Nevada Attorney for Injured Workers’ concern. She said the language to which Ms. Sweger referred was placed in statute during the 1997 legislative session, at the request of the state’s Department of Taxation, and she would object to changing that language now. She pointed out nothing in the first reprint of A.B. 12 precluded an agency from adopting a regulation and reiterated she was not amenable to further changes in the bill.

John Yacenda, Ph.D., Deputy Director, Department of Human Resources, State of Nevada, testified. He said the Department of Human Resources had been involved in many rewrites of A.B. 12, believed the department’s concerns were appropriately addressed, and supported the bill as amended.

David Howard, Public Policy Director, Greater Reno-Sparks Chamber of Commerce, testified the chambers of commerce supported A.B. 12.

Peter D. Krueger, representing Nevada Petroleum Marketers and Convenience Store Association, testified. He said he attended a number of meetings concerning A.B. 12 and believed both governmental agencies and the private business sector was well served by the latest version of the bill. He declared members of Nevada Petroleum Marketers and Convenience Store Association had many experiences with various agencies which audited them and believed A.B. 12 would go a long way to help them understand and comply with the myriad of state laws.

Chairman Bache closed the hearing on A.B. 12.

William C. Moell, Administrator, Purchasing Division, Department of Administration, State of Nevada, testified by reading from prepared text (Exhibit D). He explained S.B. 139 authorized two kinds of action designed to encourage reallocation of assets deemed excess assets by state agencies. First, the bill provided for direct transfer of excess property deemed past its useful life to any tax-exempt agency. It was anticipated that provision would be applied primarily to older computers. Second, S.B. 139 authorized transfer of excess property from one state agency to another at no cost. Reimbursement of the fund through which the asset was originally purchased would be deferred until the asset was no longer of use to the state.

Mr. Moell said the purpose of S.B. 139 was to encourage state agencies to utilize excess assets. Currently, it was difficult both to transfer assets between agencies " . . . of different funds . . . " and to plan for the acquisition of excess assets. Often agencies most likely to make use of excess assets were those agencies whose budgets were most challenged.

Mr. Moell stated the Purchasing Division believed S.B. 139 would create minimal fiscal impact, and the program the bill established would greatly benefit the few agencies that would take advantage of it.

Ms. Segerblom said she believed a bill pertaining to donating surplus property to non-profit organizations was previously heard and asked Mr. Moell whether the Purchasing Division donated unwanted, surplus assets to nonprofit organizations or what else it did with such assets. Mr. Moell replied the Purchasing Division attempted to donate such assets to whomever it could. He said a bill was heard during the last legislative session which made the definition of agencies eligible to receive state excess property identical to the definition of agencies eligible to receive federal surplus property. Those agencies were limited, nonprofit agencies, which had to first qualify to receive federal surplus property before the Purchasing Division could make state surplus property available to them.

Mr. Moell explained S.B. 139 went a step further than that bill. S.B. 139 said property that had no useful life could be donated. He cited " . . . a 286 or a 386 computer . . . " as an example of property which, because of its inability to run current software, state agencies could not retain. However, such a computer might be extremely useful to a nonprofit organization which utilized computers solely for word processing purposes or to a school district for use in teaching keyboard skills. S.B. 139 established if an asset had passed its useful life for the state, the asset could be donated without charge.

Chairman Bache said he believed Ms. Segerblom’s comment referred to Assembly Bill 164, heard the previous week by the Committee on Government Affairs, which allowed local governments to do the same thing as proposed by S.B. 139.

Ms. Tiffany referred to page 2, lines 40 and 41, of S.B. 139, and asked into what fund money from the sale of surplus property was placed. Mr. Moell replied the fund into which the money was placed depended on circumstances. He explained if a piece of surplus property originally purchased from the highway fund was sold, the money received from the sale was paid into the highway fund. If property sold was originally purchased with money from the state’s general fund, then money from the sale was returned to the general fund. The fund in which the monies were placed was not one administered by the Department of Purchasing.

Ms. Berman pointed out the words "no useful life" were used on page 1 of S.B. 139, and on page 2, line 36, the word "surplus" was used. She asked whether a distinction was made between those words. Mr. Moell replied affirmatively. He explained Nevada Department of Transportation (NDOT), for example, might use a grader for 20 or 30 years, after which time, because of maintenance problems and the grader’s degree of usefulness to NDOT, the grader was deemed excess property NDOT wanted to replace. However, the grader might yet have many years of useful life for some other agency unable to justify purchase of a new grader. Therefore, the grader still had a useful life and a degree of value. A "386 computer," however, was of little use to state government and could be deemed to have survived its useful life. It essentially had no value, and could be donated to a private, nonprofit agency.

Ms. Berman asked what the distinction was between "no useful life" and "surplus." She pointed out S.B. 139 established surplus property could be sold. Mr. Moell replied "surplus property" consisted of equipment one state agency deemed excess equipment and which no other state agency wanted. The Purchasing Division attempted to reallocate surplus state property to other governmental entities, such as cities, counties, and school districts, by selling such property to them at a price equal to its fair market value.

Ms. Berman asked whether surplus property resulted from an agency ordering more of something than it needed. Mr. Moell replied surplus property was more likely to result from property being replaced. For example, if an agency replaced an old grader with a new grader and, therefore, had an extra grader it did not need, that extra grader became surplus property.

Ms. Von Tobel asked whether state government depreciated its equipment. Mr. Moell replied the Purchasing Division depreciated equipment because the division had a purchasing fund. However, equipment purchased with money from the general fund or the highway fund was not depreciated.

Ms. Tiffany said during the 1997 legislative session, legislators had laptop computers which were to be reverted to state agencies. She inquired if she could purchase her laptop computer and was told she could not. She asked Mr. Moell if it was true legislators were not allowed to purchase legislative equipment which was to revert to state agencies and had a sale price. Mr. Moell said he understood the Legislative Commission determined it would comply with Nevada Revised Statutes (NRS) 333 with respect to equipment which belonged to the Legislative Counsel Bureau (LCB), and the laptop computers used by legislators during the 1997 legislative session were owned by LCB. The Purchasing Division purchased 33 of those laptop computers from LCB and was in the process of redistributing them to state agencies. He said, " . . . the Legislative Commission apparently made that determination, but according to NRS 333, that is not a requirement. The Legislative Counsel Bureau is exempt from that statute."

Ms. Tiffany said she was uncertain what NRS 333 said. Mr. Moell responded NRS 333 was the state purchasing statute.

Ms. Tiffany asked Mr. Moell whether he testified she could have purchased her laptop computer if it was for sale. He replied he did not. His testimony was the Legislative Commission made a determination it would abide by the restrictions imposed by NRS 333 even though it was not required to do so.

Ms. Tiffany asked what language of NRS 333 precluded her from purchasing her laptop computer. Mr. Moell replied the Purchasing Division was ordered to attempt to redistribute assets to government agencies. If it was unable to do so, it then attempted to sell those assets through public auction. When an asset was turned over to the Purchasing Division, the division was required to deal with it in a specific way.

Carole Vilardo, President, Nevada Taxpayers Association, testified. She expressed support for S.B. 139 and the fact it allowed certain equipment to be donated to nonprofit organizations. She was particularly supportive of allowing computers to be donated to schools.

Chairman Bache closed the hearing on S.B. 139.

There being no further business to come before the committee, Chairman Bache adjourned the meeting at 8:50 a.m.

RESPECTFULLY SUBMITTED:

Sara Kaufman,

Committee Secretary

APPROVED BY:

Assemblyman Douglas Bache, Chairman

DATE: